Tuesday, March 15, 2011

My generation paid for our Social Security benefits

It was the great-grandparents, not us grandparents, who recieved far more than they paid into Social Security. I, who started collecting during 2010, paid a lot of SS taxes for over 40 years. It was a bad deal for me; I could have done much better putting that 12% into my own retirement savings account.

Some academics calculated it. It was the people who retired from 1950 to 1990 who are collecting far more than they paid in. In the chart the negative territory is those who got a lot for paying little. For those retiring now the number is around zero = getting what they put in. (That's the average; I paid the maximum SS tax in most years.) The sad news is what we all know; the next generation will pay more because the politicians spend the tax receipts every year.

Andrew Biggs at American.com

Click to enlarge the graphic.

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